Gun Buybacks and Firm Behavior: Do Buyback Programs Really Reduce the Number of Guns?

Gregory E. Goering ()
Additional contact information
Gregory E. Goering: Department of Economics, University of Alaska, USA

Review of Economics & Finance, 2011, vol. 1, 31-42

Abstract: We suppose that guns or firearms are subject to an anticipated future buyback program undertaken by the government. A simple linear demand durable-goods monopoly model is then analyzed where the durable-good manufactured is a firearm that lasts for two-periods. The model is calibrated so that buyers are indifferent between selling (participating in the buyback program) or holding the gun in the future period. This allows us to focus solely on the firm¡¯s behavior. We find, among other things, that if the firm can credibly commit to its current buyers the anticipated buyback has no impact on the future stock of guns. In this case, the firm simply increases its production of new firearms after the buyback, and offsets all the units collected and destroyed by the government. However, in contrast, we show that if the seller cannot commit to these buyers, the future stock is indeed reduced (but by only one-half of the buyback program level). Thus, any anticipated (repeated) buyback¡¯s impact on future stock levels of firearms depends critically on the commit ability of the durable-goods manufacturer, independent of the buyers¡¯ reselling and arbitrage activities. Moreover, regardless of commitment ability, the model suggests the imperfectly competitive firms may, at least partially, counteract the buyback program, making any governmental buyback less effective at reducing future firearm stocks than expected.

Keywords: Monopoly; Durable goods; Gun buybacks (search for similar items in EconPapers)
JEL-codes: D4 L3 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.bapress.ca/Journal/Gun%20Buybacks%20and ... mber%20of%20Guns.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bap:journl:110103

Ordering information: This journal article can be ordered from
17 Alton Towers Circle, Unit 101 Toronto, ON, M1V3L8, Canada

Access Statistics for this article

Review of Economics & Finance is currently edited by H. Carlson

More articles in Review of Economics & Finance from Better Advances Press, Canada 17 Alton Towers Circle, Unit 101 Toronto, ON, M1V3L8, Canada.
Bibliographic data for series maintained by Carlson ( this e-mail address is bad, please contact ).